14/05/2004 17:03
U.S. stock markets dawdled at the open Friday, continuing the week's struggle between cheering strong earnings and other positives, or fearing signs of inflation in the morning's economic news and jump in oil prices.
After 10 minutes of trading, the Dow Jones industrial average (down 5.25 to 10005.49, Charts), the Standard & Poor's 500 (down 0.95 to 1095.49, Charts) index and the Nasdaq composite (down 8.56 to 1917.47, Charts) all edged lower.
The major indexes see-sawed Thursday, and for the last two weeks, as investors attempted to prepare for higher interest rates. Comments from the Federal Reserve, a second month of strong job creation, and recent economic indicators have all implied that rates will likely rise next month.
Thursday's stronger-than-forecast rise in the producer prices index and Friday's jump in the consumer price index both seemed to confirm the rate hikes, as did the soaring price of oil, with light crude currently trading at all-time highs.
Stock markets typically dislike a rising interest rate environment because it can ultimately pressure the strong economy, corporate profits and stock valuations.
Released before the start of trading Friday, the "core" component of the consumer prices index (CPI), which excludes volatile food and energy prices, rose 0.3 percent in April after an 0.4 percent rise in March, above expectations. The overall CPI rose 0.2 percent, versus a rise of 0.5 percent in March, and below expectations.
However, investors seemed to focus more on the "core" rise.
Adding to the inflationary concerns, was the price of oil. U.S. light crude has been trading over $41 a barrel on fears of supply limitations. Brent crude oil futures rose 29 cents to $38 a barrel in London.
Among other commodities markets, COMEX gold rose $1.20 to $376.10 an ounce.
Shortly after the open, the University of Michigan will release the first reading of its consumer sentiment index for May, expected to rise to 96 from 94.2 in April.
Strong earnings continued to support the market, although investors also continued to take a muted response to them. Late Thursday, Dell (DELL: Research, Estimates) reported first-quarter earnings and sales that rose from a year earlier and lifted its second-quarter outlook.
However, shares tumbled at the open, with some investors worrying about Dell's profit margins, and others disappointed that the company didn't report an even more bullish quarter.
Treasury prices rose, pushing the 10-year note yield down to 4.82 from 4.86 percent late Thursday. The dollar gained versus the yen and euro.
In international trade, Asian markets closed in mixed territory, while European markets were flat to lower at midday there.
After 10 minutes of trading, the Dow Jones industrial average (down 5.25 to 10005.49, Charts), the Standard & Poor's 500 (down 0.95 to 1095.49, Charts) index and the Nasdaq composite (down 8.56 to 1917.47, Charts) all edged lower.
The major indexes see-sawed Thursday, and for the last two weeks, as investors attempted to prepare for higher interest rates. Comments from the Federal Reserve, a second month of strong job creation, and recent economic indicators have all implied that rates will likely rise next month.
Thursday's stronger-than-forecast rise in the producer prices index and Friday's jump in the consumer price index both seemed to confirm the rate hikes, as did the soaring price of oil, with light crude currently trading at all-time highs.
Stock markets typically dislike a rising interest rate environment because it can ultimately pressure the strong economy, corporate profits and stock valuations.
Released before the start of trading Friday, the "core" component of the consumer prices index (CPI), which excludes volatile food and energy prices, rose 0.3 percent in April after an 0.4 percent rise in March, above expectations. The overall CPI rose 0.2 percent, versus a rise of 0.5 percent in March, and below expectations.
However, investors seemed to focus more on the "core" rise.
Adding to the inflationary concerns, was the price of oil. U.S. light crude has been trading over $41 a barrel on fears of supply limitations. Brent crude oil futures rose 29 cents to $38 a barrel in London.
Among other commodities markets, COMEX gold rose $1.20 to $376.10 an ounce.
Shortly after the open, the University of Michigan will release the first reading of its consumer sentiment index for May, expected to rise to 96 from 94.2 in April.
Strong earnings continued to support the market, although investors also continued to take a muted response to them. Late Thursday, Dell (DELL: Research, Estimates) reported first-quarter earnings and sales that rose from a year earlier and lifted its second-quarter outlook.
However, shares tumbled at the open, with some investors worrying about Dell's profit margins, and others disappointed that the company didn't report an even more bullish quarter.
Treasury prices rose, pushing the 10-year note yield down to 4.82 from 4.86 percent late Thursday. The dollar gained versus the yen and euro.
In international trade, Asian markets closed in mixed territory, while European markets were flat to lower at midday there.
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